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As world leaders gathered in Cancun, Mexico this week to discuss ways to come up with a uniform approach to temper climate change, various signs pointed to the United Nations-hosted meeting being rife with challenges.

That turned out to be the case, with various media reports indicating that an accord was not reached.

In Cancun this week, the main goal of the meeting was to extend the Kyoto Protocol, a 2007 international agreement linked to the United Nations Framework Convention on Climate Change that sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions from 1990 levels by a collective 5.2 percent through 2012.

A Reuters report noted the United States did not ratify the Kyoto Protocol, which is set to expire in 2012, which promoted the European Union to say that the U.S. and major emerging economies need to make emission pledges in order for the Kyoto Protocol to survive. The report added that the major challenge at this week’s meeting is to “end the deadlock on sharing the burden of emission cuts between China and the United States,” whose “relationship is already strained.”

And a Bloomberg report indicated that Japan said it won’t extend the Kyoto Protocol after it expires, because it is outdated and regulates only 27 percent of total global emissions. The report added that failure to extend the Kyoto Protocol through a UN-brokered agreement may put Japan—the world’s second biggest market for emissions credits—at risk of collapse

This meeting essentially served as a follow-up to the 2009 Copenhagen Summit, whose objective was to ratify an international climate change agreement, with all the participating countries striving to reduce their greenhouse gas emissions (GHG) levels.

The Copenhagen Summit did not deliver on its desired results, with a firm actionable plan in place. Instead, it resulted in a “soft accord” designed to curb GHG, provide ways to verify countries’ emissions levels, and save costs, among other items, according to media reports.

The United States’ stated target heading into Copenhagen, which still holds true now in Cancun, is to reduce emissions in the range of 20 percent below 2005 levels in 2020 and an 83 percent reduction by 2050.

A leading expert on green logistics and supply chains told LM that while he supports President Obama in his desire to secure the U.S. as a leader in reducing GHG’s, unless developing nations agree to reduce their GHG usage, too, any plan implemented by the U.S. will be hollow.

“Also, I have to question the goal of reducing GHG’s by 83 percent by 2050 as I haven’t seen a plan that lays out a coherent strategy for achieving such a reduction that I can support,” said Brittain Ladd, a supply chain consultant and lecturer on green supply chain strategies for a consulting firm. “My advice to the White House and Congress would be to create a GHG reduction ‘Manhattan Project’ with participation from leaders of the major economies, developing nations and the business community for the purpose of separating fact from fiction in terms of climate change in order to build a consensus.”

Ladd also pointed out that potential negative consequence this type of mandate could have on business and supply chains, explaining that the worst thing that could happen to the United States is that massive amounts of climate regulations are enacted that put U.S. businesses at a disadvantage while developing nations continue operating as normal.

On top of this, the United States current outlook for a national energy policy has remained stalled since the American Power Act bill did not attain Congressional approval.
What this means from a freight transportation and logistics perspective remains to be seen. On one hand, it is good that current oil and diesel prices are nowhere near the record highs seen two years ago. But at the same time, that does not mean that shippers and carriers are abandoning sustainability and “green” efforts—in an effort to save money and be more efficient either. In fact, it seems that the combination of stalled legislation, a slow economy and fairly modest energy prices may actually provide an opportunity for freight transportation stakeholders to get a true green-plan in place so they are prepared for the next spike in prices or whatever else the future may bring.
With no closure coming anytime soon on the legislative front, what happens now when it comes to the business of “green logistics” remains to be seen.

“I am afraid that what is going to happen is because this legislation has stalled everyone will probably go back to business as usual and probably not do some of the things they should be doing when it comes to sustainability,” said Kevin Smith, president and CEO of Sustainable Supply Chain Consulting, in a recent interview. “One thing we do not have in the supply chain industry is a unified lobbying process for these matters. So you have trucking and rail and other sectors with their own groups and associations, but there is no unified structure inside or outside of Washington, DC that is saying for the good of the economy in general there needs to be a structure or guidelines for things to do and to get a unified message across as opposed to being a bunch of special interest groups.”

And with no legislative mandates coming down anytime soon, Smith said shippers and carriers need to rely on a combination of common sense and lessons learned from the recession to be green-minded, whether it be improving efforts to maximize trailer space, run supply operations more leaner, leveraging Software-as-a-Service technologies to link systems together, and use less energy and fuel, and doing things that create economic benefit for a company.

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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